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China's Ministry of Commerce plans to scrutinize foreign investment more closely – CNBC

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China’s Ministry of Commerce Spokesman Gao Feng addressed reporters at a regular press conference on April 29, 2021 in Beijing, China.
VCG | Visual China Group | Getty Images

BEIJING — China’s Ministry of Commerce plans to scrutinize foreign investment more closely on the basis of national security.

The ministry’s priorities for the next five years — released publicly this week — include reference to the “Measures for Security Review of Foreign Investment” that took effect in January. These measures generally require pre-review of foreign investment plans related to the Chinese military, and important agriculture, energy and technology products.

While the brief mention of the review system — on page 43 of the 46-page document — doesn’t necessarily represent new action by Chinese authorities, the reference does indicate foreign investment into China can face greater scrutiny.

In the last few years the U.S. has increased its scrutiny of Chinese investment in the country, although American businesses have faced far more restrictions on where they can invest in China.

In a section about preventing risks form foreign investment, the commerce ministry said it would “improve the national security review system for foreign investment, and open security investigations into foreign investment that affects or could affect national security.” That’s according to a CNBC translation of the Chinese text.

However, the ministry also said it would expand the areas that foreign capital could invest in, including strategic areas such as telecommunications, the internet, education and health care. The ministry said it would further relax the ability of foreigners to make strategic investments in publicly listed companies.

The document follows the release of the central government’s 14th five-year plan in March. Beijing issues such economic development priorities every five years, and government departments and local authorities subsequently release details on how they plan to implement national goals.

The Ministry of Commerce plan noted the need to respond to the impact of trade tensions with the U.S., while increasing collaboration with U.S. states and local governments.

The ministry forecast average annual growth of 5% in retail sales through 2025, with the portion sold online growing at a slightly faster 7.6% pace. Imports and exports of goods will likely grow an average of 2% a year through 2025, the plan said.

Overall, the ministry emphasized how it would work to build up China’s domestic market, in line with Beijing’s “dual circulation” plan.

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Montreal investment fund sued over use of founder's great-great-grandfather's name – Montreal Gazette

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The Holt Xchange, which invests in early stage financial technology startups, is being sued by Credit Suisse for trademark violation.

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Brendan Holt Dunn said he wanted to invoke the legacy of his great-great-grandfather, pioneering Quebec industrialist Sir Herbert Holt, in the name of his Montreal-based venture capital fund.

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Now, he may have to go to court to keep the name.

His fund, the Holt Xchange, which invests in early stage financial technology startups, is being sued by international bank Credit Suisse for trademark violation.

In a statement of claim filed last year with Federal Court in Edmonton, Credit Suisse subsidiary CSFB HOLT said it owns the right to use the brand “HOLT” when offering financial goods and services in Canada and that the branding and offerings of the Montreal venture capital fund — known as the Holt Accelerator when the lawsuit was filed — is too similar.

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The bank, which is seeking at least $100,000 in damages, argues that similarity “will cause confusion amongst Canadian consumers” and reduce the value and reputation of its trademark.

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Dunn said he doesn’t think there’s a risk of confusion.

“We’re in different areas, the financial sector as a whole is very broad,” he said, adding that he’d never heard of Credit Suisse’s HOLT brand before being sued.

“I think what they’re worried about is that our name, our family’s name is better known than them in Canada,” he said in an interview last week. “There is absolutely no overlap.”

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Elisabeth Laett, managing partner at the Holt Xchange, said the decision to use the Holt family name when the fund launched in 2018 was a reference to the history of Montreal’s financial sector and the fund’s ambitions to help make Quebec a hub for a new generation of financial technology companies.

“We were the financial hub of Canada, in Montreal, at one point,” she said.

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When Herbert Holt died in 1941, he was described as the richest man in Canada. A railway engineer who helped build the Canadian Pacific Railway, he was knighted for his work planning railways in France during the First World War. He later consolidated several power companies in the Montreal area — which would eventually be expropriated to create Hydro-Québec — and was president of the Royal Bank of Canada from 1908 to 1934.

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Holt was also a controversial figure in Montreal at a time when many French-speaking Quebecers resented the city’s English-speaking business elite.

In court filings, the Holt Xchange maintains the Holt name has been used by generations of family members when offering financial goods and services in Canada. It has also filed a counter claim seeking to have Credit Suisse’s HOLT trademark struck down.

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Credit Suisse’s HOLT brand comes from the name of a United States-based financial consulting firm acquired by the bank in 2002 and is an acronym based on the letters of the last names of consulting company’s founders. The bank, which filed an application to register the “HOLT” trademark in Canada in 2006, sells software used to value companies, as well as offering consulting services and investment products, under the HOLT name.

Whether consumers would interpret “Holt” in the name of the Montreal venture capital fund as a reference to the Holt family is one of the issues being disputed in court filings.

Teresa Scassa, the Canada Research Chair in information law and policy at the University of Ottawa’s law faculty said the courts look at several factors when evaluating the possibility of confusion in trademark cases “including how long each name or mark has been in use, and how similar the goods and services are, and the way in which they’re marketed or sold.”

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While the Trademarks Act allows people to use their own names as trade names, she said that defence has “been interpreted fairly narrowly,”

“For example, someone named McDonald is not prevented from using their name in business and if they open a burger stand, they’re not prevented from using their name in their family business to sell burgers, but they can’t just call it McDonald’s,” she said. Instead they have to make it clear it’s a different business.

Credit Suisse spokesman Jonathan Schwarzberg declined to comment on the case, saying the bank can’t say anything publicly beyond what’s in court filings. No trial date has been set.

Dunn said the fund entered into negotiations with Credit Suisse after the lawsuit was filed and changed its name from Holt Fintech Accelerator to the Holt Xchange in the spring, a move he said he thought would satisfy the bank.

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He noted there are other companies using the name Holt.

“I don’t understand it,” he said. “It’s insulting and we’re obviously feeling like we’re being bullied. We’re a very successful family, but no family in the world can go up against a financial institution.”

Laett said the Montreal fund has built an international brand around its name, attracting interest from startups from around the world. “We’ve received roughly 3,000 applications to be part of Holt,” she said. “There is a tremendous momentum.”

Dunn said he’s not open to dropping “Holt” from the company’s name.

“It is my personal name and my family’s name and our family’s history and reputation in Canada,” he said.

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Canada Sets Plan to Merge Investment Regulators Into One Agency – Bloomberg

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Canada’s securities regulators plan to merge two industry groups that oversee financial advisers into a single organization, a move intended to address years of complaints about the overlapping roles and higher costs of the groups.

Provincial regulators published Tuesday a framework for how to combine the Investment Industry Regulatory Organization of Canada, which regulates investment advisory firms that sell a broad range of securities, with the Mutual Fund Dealers Association of Canada, which oversees firms that sell funds.

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Carlyle to Invest in Abrigo at $1 Billion-Plus Valuation – Bloomberg

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Abrigo, an Accel-KKR-backed software provider for financial institutions, has secured an investment from private equity firm Carlyle Group Inc.

The Austin, Texas-based company is valued at more than $1 billion after the investment, according to people with knowledge of the matter who asked not to be identified discussing private information.

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